The quick decision in raising or slashing spot indicates cotton production not only locally but elsewhere in cotton growing countries too production estimate was higher during the week ended on November 15, 2008. The spot rate on Monday was Rs 3175 but it was finally brought down to Rs 2950.
WORLD SCENARIO:
Futures again showed weakness under impact of global recession fear ignoring prospective news from the USA and China. The December on the opening day was down 0.83 to 41.24 cents a pound while March shed 0.45 cent to 44.76 cents a pound. The monthly supply and demand report usually providing direction was not taken seriously. It said 2008-09 cotton ending stocks increased to 57.40 million bales from earlier 55.45 million bales while consumption was said to be down 119.33 million bales from earlier 122.31 million bales.
On Tuesday futures were low at 5 1/2 year naturally so as all round sales were seen owing to global recession fears. The players noted that the economic slow down, serious financial crisis and stronger dollar have slowed consumption substantially. Others giving their observation expressed the continued decline in prices was attracting mill buying but that was simply not enough to stop the near free fall in fibre values. Harassed traders were looking on December contract to touch 37 cents low.
On Wednesday futures were noted mixed as the market was stated to recover slightly from continued fall to new lows, but market sources were far from satisfaction in view of the crippling recession fear that hover around the globe.
Happy news here and there such as oil prices down 20 months lows and other goods sources expressed hung on. Investment fund liquidation at the outset of the session which pushed lower December to new life time lows for the fifth session running. Switch trade also added to the pressure in the front month. Traders said some hand-to-mouth mills buying was witnessed which naturally induced some short covering.
Futures on Thursday rose substantially backed by investors short covering and switch trade as market rebounded from a fall. The market players however did not feel encouraged and viewed trading to remain weak. After contracting to new lows through the week, the spot contract rebounded as investors indulged in short covering and switch trade before deliveries in December contract in a week's time.
On Friday mixed pattern emerged helped by switch over trade prospect, but receded due to prevailing dwindling confidence on account of couple of reason. Analyst saw decline in cotton prices which inevitably will shrink further US cotton plantings in 2009. A group report expressed the impact on smaller area was linked to be one reason for futures to rally but it is enough to hold value up. December contract lost 0.27 to 41.03 the march was up 0.65 to 42.51 cents a pound.
LOCAL TRADING:
The buying sustained on the cotton market despite prices fluctuations on both sides raising hope that spinners and textile exporters have seen light at the end of the tunnel. Exports have been on the persistent slide now, with smoother cotton supply and conditions favourably supportive, efforts seem to cover up the losses so far. For quite some weeks buyers seem continually aggressive often lifting 20000 to 40000 bales in one day.
However, on the opening day the spot price pushed up the other day was pulled down by Rs 25 to Rs 3175. Phutti in Sindh and Punjab was being sold at Rs 1550 to Rs 1600 per 40 Kg, a level that was agreeable to ginners and growers. The trading corporation of Pakistan (TCP) entry has been haunting couple of minds, as prices firmed before its physical ravaging. The day saw 22,000 bales changing hands between Rs 3075 and Rs 3250 per maund. Internationally speaking, cotton situation remain easy with firm support from global recession fears.
On Tuesday for couple of reasons prices dipped in local cotton market and buying support continued with gusto. The cotton consumers lifted around 15000 to 18000 bales knowing fully weak prices could take different turn on any ground. The ginners have once again been threatening to go on strike and consequent result is apparent. Spot rate dropped Rs 25 to Rs 3150 while phutti was selling between Rs 1475 and Rs 1525. A deal from Sultanabad was struck at Rs 2850 lowest in recent past.
On Wednesday the long wait to see TCP to enter market and stabilise trading proved disgusting for the growers and ginners who called upon shaky authorities to "hurry up TCP or give up the mission" following spot rate dropped Rs 150 in one stretch on Wednesday. The earlier two days trading had also bore the brunt pulling down spot by Rs 50. The SBP's announcement at a time when everything tooked up set and hardly in hand of authorities had further made subject of criticism. When textile exports looked going with desired pace, ginners in less than a month voiced threat to stop running mills unless support price of seed cotton and cotton is not announced without delay.
On Thursday another Rs 50 was reduced sending spot rate to Rs 2950 while phutti stayed nearly put in Sindh at Rs 1400 and Rs 1500. Over 20,000 bales were pounced at declining prices in the absence of TCP entry while strengthening ginners call to announce phutti rate at Rs 1800 and cotton at Rs 3500. The market sources were not satisfied with the purchase volume despite bothering about dollar's firm moves.
On Friday spot rate was tired falling all the way as it stayed at Rs 2950, phutti in both Sindh and Punjab ruled at Rs 1400/1500 more or less 20,000 bales were done at price ranging between Rs 2800 and Rs 3000 per maund. The TCP entry is awaited eagerly. The whisper was loud. It was showing up on Friday now may be on Saturday. Did entry materialise and at was outcome? -
On Saturday Firmness persisted on the cotton market as phutti prices moved with modest gain amid slow trading. The official spot rate was at Rs 2950, the phutti prices inched up with modest gain in both Sindh and Punjab at Rs 1425-1525. Business volume came down to less than 10000 dales and prices moves between Rs 2800-3199.
ROZ's SURE, GO AHEAD:
It is well known what China does to promote exports which have boosted it to see eye to eye to any power on earth. Had similar idea been floated by any country China would not have waited for months for money to come from the country had floated the idea.
The ROZs was heartily accepted for NWFP and Fata to remove, partly though, deprivation struck workable men, women and youth. Had efforts made through years the deplorable state that voices are up against the country created at the cost of Lakhs of people. convinced of enormous and wide-ranging resources, and above all cheap, but honest and hardworking human resources.
The country has for decades waited someone, who could do to better the lot of peasant who go to floor-bed often hungry but ensure their country men enjoyed bread buttered on both sides. Their folks now have taken refuge in open under trees instead of taking to roads to demand right to live honourably. They look for some servile jobs in rich country to also have bulks burning in a jhuggee with belly full. The business and industries don't have provision to get them trained for better wages. The opportunities that show faces few and far between are calculated to restrict distribution of wealth.
The so called ROZs which was floated by friends with certain aim has been delayed not without reason and authorities stuck to promise made which has been delayed for a year or so, justice delayed is justice denied. The NWFP team is planning to visit in the aftermath of presidential elections won by Democrat candidate who is being overly expected to bring about stability in the region which Pakistan needs for exports expansion and peaceful co-existence. There is nothing written on the face of people who is likely to deliver.
Interest has been blocking ways for peace and economic development. May be he expedites to ensure quick passage of necessary legislation and necessary funds for ROZs start streaming down to determined areas. Even if some indifference is shown. Pakistan should begin spade work until sufficient funds are arranged by local investors world who seems reluctant to help should know Pakistanis are lack of will, not of money!
SUPPORT PRICE OF COTTON:
The food Ministry has moved a summary to the PM regarding support price of cotton which is likely to be approved in the coming meeting of the federal cabinet. The authorities are in better position to know facts about things they speak about, the sources closely related to cotton and textile trade. Particularly they pointed this because they themselves are farmers, producers or traders, and enter politics and are provided power to decide about businesses, crop and exports. But decision taking is different which has been creating ill will the victims and served no body's interest.
The ministry has suggested support price of cotton at Rs 3,500 for 40 Kg, without perhaps, closely watching or have experienced the typical ways of cotton buyers. The sources said buyers have many options, particularly option of buying cheap cotton from around the world. They are not necessarily bound to buy as expeditiously as ginners receive the phutti apprying tacit pressure to cut prices. On turn the ginners can use their discretion to whimsically slash the phutti prices not exactly as government desires such as one in this case, Rs 1800 being fixed.
All know how difficult in this country is get government decision based on however honesty and well-being is implemented. Authorities should keep close touch with ginners and their gains, but the growers particularly the peasants with small holding interest should be closer in view whose produce for any reason cannot be held for long without getting coloured or damaging quality. The authorities in any government position should know by impecably discussing every detail of portfolio they hold.
The teams and even secretaries whose job is supposed to be permanent be consulted to do justice to the job. The past years should be guard to all that for 60 years this country had government and had host of authorities probably were awarded portfolio in which their knowledge was not adequate.
Looking not only to the cotton or textile fields a cursory look at departments, exports, income tax finance so on so forth will expose facts for holding beggars' bowl, unwilling though!
WTO CHIEF FOR 2ND TERM:
The delay has pained the WTO chief who is adamant to win another term presumably believing in his organisation's innate good for centuries deprived voiceless folks. The way powers have been handling the global trade and commerce in topsy- turvy way has kept poor on the defensive and at a loss financial and every way.
The chief Pascal Lamy believes once a deal is struck no room will be left for usurping the rights hitherto, have been held poor from emerging. Being himself a top member of European Union a conglomerate of about two dozen of states is convinced the spirit behind the rulers would guide the global trade to a buttered loaf for all.
Quite often his appeal for more access from the rich is bound to come. But he must have also been bothering big events that precede the so called reforms like the once following world wars. The reforms reach only to the rich.
The WTO was launched not necessarily with the high ideal of providing meals to months and smiles on faces but for five years world's finest brains have only looked at each other's faces to read where is the sign of shrewdness most spectacular. The powers had been trying to pull China in line with them to force its currency value down and today China and ME powers are being reminded of responsibilities they owe towards nations who have been feeling half way.. the WTO deal is struck or not, it will be always at the cost of poor nations and poor.
There now fewer people who believed thus poor nations have been warned their textile products and other exportables supporting unemployed and unskilled workers will farther down. Greater responsibility lie on emerging nations like Brazil and India should see themselves with LDCs to give moaning to WTO today and like things in future.
TRAINING PROGRAMME:
The training programmes being launched is welcome, but at a time when dual harm was likely. The training programmes will do good, but it should have been started in a big way decades back. So far businesses and industries have been run with two bread earners at almost wages yielding them as much food to sustain his life. Even those labours who were sent to wealthy countries were not at any better terms. It was however, the value of currency sent back to families that looked more welcome.
Today as the exports have been losing their innate potential, labours are considered for exports. Government land and assets all sold at prices authorities know well, perhaps nothing but poor children, parents are seen selling away or killing for failing to feed them, are being planned.
Thank God, somebody took pains to equip them with skill so that they can sent back home better revenue. But the cost today is being paid is too high which is coming at great cost. The loans are always abhorring, particularly when it was being secured from IMF. Authorities for days making masses believe they would not have same, which is guaranteed at draconian terms. Some leaks occurred or the sixth sense communicated people who came on roads with placard: Loan is Not For Me: NO To IMF -. The masses have always told there is no dearth of money - they were never told where they had come from?
As Minfal is said to be launching programme for training and the auspicious of Agribusiness Development Diversification project. Meanwhile, another technical training scheme for so called "deserving people" is being launched shortly. The authorities see Pakistan has great potential for human development and are convinced it has great capacity to export work force and earn foreign exchange reserves - which always remain hungry, sources said.